Administrative penalties

The ATO will now have the power to impose a monetary penalty on SMSF trustees and directors of SMSF trustee where the trustees have contravened any of 17 listed SIS Act provisions. These penalties will be collected by the ATO in the same manner as if it were a tax-related debt of the SMSF trustee.

The main listed provisions and the maximum penalties are set out below:

1. Breach of a prescribed standard	$3,400
2. Failure to prepare financial statement /failure to retain financial statements for 5 years	$1,700
3. Breach of the lending rules	$10,200
4. Breach of the borrowing rules	$10,200
5. Breach of the in-house asset rules	$10,200
6. Failure to keep minutes and records for 10 years	$1,700
7. Failure to keep records of changes in trustees and consents for 10 years	$1,700
8. Failure to keep member/fund reports for 10 years	$1,700
9. Failure to appoint investment managers in writing	$850
10. Failure to comply with an educational direction	$850

It seems that these penalties are not maximum penalties but the penalty for the contravention.